In a significant shift from its stated policy, Australia on Thursday conveyed to New Delhi its decision to export uranium fuel for the Indian nuclear power plants.

But the export will be subject to certain strict conditions, including an Indian assurance that “Australian uranium would remain in peaceful uses at all times” and a bilateral pact with a “verification mechanism” in place, Prime Minister John Howard told his Indian counterpart Dr Manmohan Singh over phone from Canberra.

Moreover, the conclusion of a suitable safeguards agreement between India and the International Atomic Energy Agency covering all designated civil nuclear facilities is a must before the actual supply commences.

“Mr Howard had telephoned Dr Singh to convey his government’s decision. Dr Singh thanked Prime Minister Howard and it was decided that the matter would be discussed further at the official level,” said a spokesperson of the Ministry of External Affairs.

With almost 40 per cent of world’s natural uranium reserves, Australia — a trusted US ally — is one of the largest suppliers of uranium fuel along with Canada. But it never had any uranium trade with New Delhi, traditionally a close Soviet ally.

In fact when Howard visited India in July last year, he had rejected Dr Singh’s request for uranium export, saying Australia had no intention to change its policy in this regard. But the shift in the policy within a year signifies a new high in the strategic relations between Canberra and New Delhi, as a new four-nation group involving Australia, India, USA and Japan, is being evolved in the Indian Ocean region presumably to thwart Chinese threats.

Interestingly, Australia will be one of the countries participating in the five-nation naval exercise in the Bay of Bengal in September. Beijing had protested strongly against the exercise arguing that its sole purpose was to strengthen this anti-China group.

But for the uranium export to materialise, the Australian government has listed a number of conditions which the Department of Atomic Energy has to fulfil before the actual supply can commence.

In addition, the 123 agreement between the US and India has to be inked formally and the Nuclear Suppliers Group has to take a consensus decision to make an exception to its guidelines enabling international civil supply to India, says an official statement released by the Australian High Commission in Delhi.

If the export deal is realised, it will be of significant economic and strategic advantage to both the countries, it says, adding that the industry (uranium trade) already generates $ 658 million annually in exports, and India will be a large and growing market.